Posted on: Tuesday, September 23, 2003
Jobs, tourism spur Kaua'i boom
• Chart: Business is better on Kaua'i
By Jan TenBruggencate
Advertiser Kaua'i Bureau
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| Grove Farm's Kukui Grove Center renovation, with costs estimated at more than $12 million, should be mostly complete by this Christmas. The reworking of the island's largest shopping complex started in late 2001.
Photo by Jan TenBruggencate • The Honolulu Advertiser |
LIHU'E, Kaua'i — Kaua'i's economy has lagged behind the rest of the state ever since Hurricane Iwa stopped it cold in 1992. But it has been steadily improving recently, and this year it's a vibrant engine firing on all cylinders.
First Hawaiian Bank economic consultant Leroy Laney said the island's economic strength is broad-based, and one of the key indicators is job growth. Nonfarm jobs are up 4 percent in the first half of the year, compared with 2.5 percent statewide.
The island's unemployment at 4.5 percent is remarkable, particularly considering that in 1997 it stood at 11.3 percent.
Laney, a professor of economics and finance at Hawai'i Pacific University, cited increased visitor numbers, a busy construction industry, active home sales, and strong film and high-tech sectors. He presented the bank's 29th annual report on the island's economy last night at the Sheraton Kaua'i Resort in Po'ipu.
With all the good economic news, Laney said there are some caution flags, dealing with an island infrastructure not keeping up with the growth, and lower-to-middle-income residents being priced out of the housing market.
"As development and tourism grow, roads, airports, harbors need to keep pace. The failure of infrastructure to do so affects residents and tourists alike," Laney said.
Government agencies facing tight budgets may have difficulty meeting the infrastructure needs, he said.
Laney also cited a concern that real-estate professionals have discussed in recent months — that real-estate prices generally are rising and that most new housing is being built in the higher-cost range, putting homeownership beyond the capabilities of what Laney called "local buyers of more modest means."
Tourism on Kaua'i is booming, with new nonstop Mainland-Kaua'i flights by United, American and Aloha Airlines, more cruise-ship arrivals, and the continuing strength of the time-share market, Laney said. Kaua'i leads the state in time-shares, with 37 percent of all Hawai'i's time-share units. This has provided the island with an economic buffer to the declines other islands faced after the Sept. 11 terrorism strikes.
"Having already paid for their time, time-share owners did not cancel as much." Laney said.
The island has had strong new residential construction, and with several major commercial construction projects under way, Kaua'i has close to 35 percent more people working in construction than it did in 1999.
Among the major projects are the recent expansion of Grove Farm's Puakea Golf Course to 18 holes, and the more than $12 million the firm is spending to renovate its Kukui Grove Shopping Center — a project scheduled to be mostly done by Christmas. Kaua'i's first Home Depot store should also open before Christmas.
In Po'ipu, Alexander & Baldwin is working with partner DMB Associates on its 1,500-home Kukui'ula project, and the Marriott expects in mid-2004 to finish converting the old Wai'ohai hotel property to a time-share complex. The Hyatt Regency Kaua'i resort expects to have spent $25 million when a 16-month reroofing and room renovation is complete.
Farther west, Alexander & Baldwin is now leasing its 24,000-square-foot Port Allen Marina Center.
Laney said the island is being helped by an active film industry — a major feature film could be made on the island later this year — along with growing technical employment associated with the Pacific Missile Range Facility and an agriculture industry that remains an important part of the economy even though it's not growing as fast as the rest.
County economic development director Beth Tokioka said Kaua'i needs to be careful in these good economic times to continue to diversify its economy. Mayor Bryan Baptiste is reactivating a mayoral advisory committee on agriculture and is supporting the training of workers for high-tech industries, she said.
"We should take the opportunity now to start taking positive steps in new directions. We can't count on these (positive economic) results continuing forever," Tokioka said.
Reach Jan TenBruggencate at jant@honoluluadvertiser.com or (808) 245-3074.
